Hollande ally charged over tax evasion

Ex-minister's downfall deals blow to Socialist administration

PARIS – Former French Budget Minister Jerome Cahuzac was charged Tuesday in a tax fraud probe after he admitted having a foreign bank account, dealing a fresh blow to President Francois Hollande’s embattled government.

Critics were quick to pounce on the scandal, demanding to know if Hollande or other top officials were aware of the account held by the minister once responsible for cracking down on tax evasion.

In a contrite statement on his website, Cahuzac admitted to having had the foreign account for around 20 years and said he was “devastated by guilt.”

The ex-minister’s lawyer, Jean Veil, said Cahuzac had been charged with “laundering the proceeds of tax fraud” and would cooperate with investigators.

Cahuzac — the first minister in Hollande’s administration to face a criminal probe — said he had met with investigating magistrates Tuesday and admitted to having a foreign account.

Cahuzac said the account contained about €600,000 ($770,000), had not been touched in about a dozen years and that he had ordered the funds transferred to his French account.

His lawyer said the account, originally opened in Switzerland, had been transferred to Singapore in 2009 and that the amount laundered was equivalent to about €30,000.

Cahuzac begged forgiveness from Hollande, his former government colleagues, fellow lawmakers, French voters and his family and his friends.

“I was caught in a spiral of lies and lost my way. I am devastated by guilt,” he said “It was an unspeakable mistake to think that I could avoid confronting a past that I wanted to consider behind me. I will now face this reality with all transparency.”

Hollande, languishing in the opinion polls less than a year into his five-year term, said his former minister had committed an “unforgivable moral error” and that the courts would decide his fate.

“Lying is not acceptable in a democracy,” Prime Minister Jean-Marc Ayrault said. “It is now up to (Cahuzac) to fully take responsibility before the justice system.”

Aides to Hollande said late Tuesday Cahuzac had lied to the president “face to face,” as well as to lawmakers in the National Assembly and on the sidelines of Cabinet meetings. An aide said the government had not been “naive” in handling the case but that the former minister had failed as he “lied to all state authorities” and “for months flatly denied what he later admitted.”

Hollande had promised a government of unimpeachable morals, and critics wasted no time Tuesday in jumping on the scandal. “The president must assume his responsibilities in the face of this state lie and explain himself before the French people,” said Jean-Francois Cope, the head of the main opposition rightwing UMP party.

“I find it hard to imagine that Hollande and Ayrault were not aware” of the existence of the account, added Christian Jacob, the head of the UMP’s faction in the lower house National Assembly.

Cahuzac announced his resignation on March 19 after prosecutors opened a probe into the account, first revealed by the investigative Mediapart news website.

The site released an audio recording reportedly of Cahuzac admitting to having the account with Swiss bank UBS. In the recording, a man is heard saying, “It bothers me to have an account there, UBS is not necessarily the most hidden of banks.”

Little-known before being named a minister, Cahuzac, 60, began his career as a cardiologist before switching to the more lucrative world of plastic surgery, in particular hair transplants.

Elected to the National Assembly in 1997, he headed its commission on public finances and was named budget minister when Hollande formed his first government.